November 03, 2011

The Life Spiral: New Channels

Businesses in the "Life Spiral" frequently exhibit a nice diversity of old and new channels.

Take social, for instance. The average catalog brand creates a Twitter presence, then offers thirty-five or forty tweets encouraging the customer to take 20% off plus free shipping. Predictably, the channel doesn't work, it is determined that "social doesn't work", and that's the end of the story. Over time, a preferred channel takes hold, and the customer ages along with the channel.

Businesses climbing the "Life Spiral" experiment with new channels. They simply don't focus on the "core business". They earn merchandise productivity after seeding the business with new products and new customers, using improved profitability to experiment, to not rest on laurels.

Businesses climbing the "Life Spiral" prioritize experimentation. A mobile initiative is not buried on the information technology "Book of Work" ... folks happily choose to build the mobile website, Management gladly prioritizes the new opportunity over the re-write of the COBOL-based order-entry system.

Businesses climbing the "Life Spiral" do not over-think attribution. These businesses simply don't care if the mobile site fully cannibalizes e-commerce (see eBay), instead, these businesses seek to learn as much as possible, not necessarily trying to be industry leaders but instead quantifying how customers respond to new opportunities.

Businesses climbing the "Life Spiral" assign a purpose to a channel, choosing to not expand into new channels because a blogger or a trade journalist write an article. A mobile initiative surrounds solving a real customer need. Social Media is often assigned to customer service, not marketing, in order to take care of genuine customer problems. Affiliate marketing programs yield customers that are assigned to outlet/clearance contact strategies, given the propensity of the customer to look for a deal.

When a business climbs the "Life Spiral", clarity of channels becomes obvious. Every new channel is assigned a strategic place in the company ecosystem. Employees are not demonized if a channel fails. Sales attribution is secondary to the knowledge gained in new channels.

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Kevin Hillstrom, President, MineThatData

Kevin is President of MineThatData, a consultancy that helps CEOs understand the complex relationship between Customers, Advertising, Products, Brands, and Channels. Kevin supports a diverse set of clients, including internet startups, thirty million dollar catalog merchants, international brands, and billion dollar multichannel retailers. Kevin is frequently quoted in the mainstream media, including the New York Times, Boston Globe, and Forbes Magazine.

Prior to founding MineThatData, Kevin held various roles at leading multichannel brands, including Vice President of Database Marketing at Nordstrom, Director of Circulation at Eddie Bauer, and Manager of Analytical Services at Lands' End.

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